Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9. Balance sheet data for the two companies immediately following the acquisition

Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9. Balance sheet data for the two companies immediately following the acquisition follows:

Item

Pace Corporation

Spin Company

Cash

$

30,000

$

25,000

Accounts Receivable

80,000

40,000

Inventory

150,000

55,000

Land

65,000

40,000

Buildings and Equipment

260,000

160,000

Less: Accumulated Depreciation

(120,000

)

(50,000

)

Investment in Spin Company Stock

150,000

Total Assets

$

615,000

$

270,000

Accounts Payable

$45,000

$33,000

Taxes Payable

20,000

8,000

Bonds Payable

200,000

100,000

Common Stock

50,000

20,000

Retained Earnings

300,000

109,000

Total Liabilities and Stockholders Equity

$

615,000

$

270,000

At the date of the business combination, the book values of Spin's net assets and liabilities approximated fair value except for inventory, which had a fair value of $60,000, and land, which had a fair value of $50,000. The fair value of land for Pace Corporation was estimated at $80,000 immediately prior to the acquisition.

Based on the preceding information, what amount of total assets will appear in the consolidated balance sheet prepared immediately after the business combination?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: John J. Wild, Ken W. Shaw

2010 Edition

9789813155497, 73379581, 9813155493, 978-0073379586

More Books

Students also viewed these Accounting questions

Question

Compute the dot product. (3, 1). (4,-7)

Answered: 1 week ago